Tuesday 14 December 2010

FT.com / Iraq - Calls for bank reform to unlock Iraq’s potential

Being a banker in Iraq can be a challenging and dangerous occupation.

In the first place, there are the obvious security threats. This year alone, the central bank and the government-owned Trade Bank of Iraq have been targeted by suicide bombers. A single movement of cash in Baghdad can cost $5,000 to $6,000 because of security requirements. “I would say [security] probably costs $1m to $2m, in terms of our cost base per annum,” says one banker.

Then the banks find themselves working in a predominantly cash-based economy with little transparency and outdated infrastructure. The first ATM was only introduced in 2005 and the machines remain scarce. Credit cards are an alien concept.

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